Correlation Between TRADEGATE and CSL

Can any of the company-specific risk be diversified away by investing in both TRADEGATE and CSL at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining TRADEGATE and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TRADEGATE and CSL LTD SPONADR, you can compare the effects of market volatilities on TRADEGATE and CSL and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in TRADEGATE with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEGATE and CSL.

Diversification Opportunities for TRADEGATE and CSL

0.3

Correlation Coefficient

TRADEGATE  CSL

Weak diversification

The 3 months correlation between TRADEGATE and CSL is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding TRADEGATE and CSL LTD SPONADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL LTD SPONADR and TRADEGATE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on TRADEGATE are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL LTD SPONADR has no effect on the direction of TRADEGATE i.e., TRADEGATE and CSL go up and down completely randomly.

Pair Corralation between TRADEGATE and CSL

Assuming the 90 days trading horizon TRADEGATE is expected to generate 125.73 times less return on investment than CSL. But when comparing it to its historical volatility, TRADEGATE is 5.13 times less risky than CSL. It trades about 0.0 of its potential returns per unit of risk. CSL LTD SPONADR is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  6,500  in CSL LTD SPONADR on April 22, 2025 and sell it today you would earn a total of  550.00  from holding CSL LTD SPONADR or generate 8.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

TRADEGATE  vs.  CSL LTD SPONADR

TRADEGATE

Risk-Adjusted Performance

Very Weak

Over the last 90 days TRADEGATE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, TRADEGATE is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

CSL LTD SPONADR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CSL LTD SPONADR are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, CSL may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with TRADEGATE and CSL

The main advantage of trading using opposite TRADEGATE and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEGATE position performs unexpectedly, CSL can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CSL will offset losses from the drop in CSL's long position.

The idea behind TRADEGATE and CSL LTD SPONADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.